How Does a Change in the Risk-Free Rate Affect the Theoretical Price of a Long-Dated Crypto Option?

An increase in the risk-free rate generally increases the theoretical price of a call option and decreases the theoretical price of a put option. This is because a higher risk-free rate reduces the present value of the strike price that will be paid in the future for a call, and increases the present value of the cash received for a put.

This effect is more pronounced for long-dated options because the compounding period is longer.